Monday, October 19, 2020 at 8:19:37 AM GMT+10:00
Graham Russell, Managing Director, HSC Technology Group
HSC Technology Group is formed by a team of industry leaders in the health and aged care technology sector to provide a solution to the growing need for more efficient service delivery for senior Australians. They do this by using data from the Internet of Things (IoT), to provide decision-making insights and information through IoT-enabled hardware and proprietary machine learning and artificial intelligence (AI) software. Today Boardroom.Media Reporter, Velvet-Belle Templeman is joined by HSC Technology Group Managing Director, Graham Russell to provide an update to the market.
Welcome to Boardroom.Media, I'm Velvet-Belle Templeman, and today I'm joined by Graham Russell, the Managing Director of HSC Technology Group, an ASX listed company formed by a team of industry leaders in the health and aged care technology sector to provide a solution to the growing need for more efficient service delivery for senior Australians. They do this by using data from the Internet of Things to provide decision making insights and information through IOT enabled hardware and proprietary machine learning and artificial intelligence software that improves people's safety, independence, autonomy, and most importantly, their lives. HSC’s telehealth and smart care solutions are utilised by a wide range of industries, including aged care, security and safety and smart home automation. Graham, thanks for being here.
No worries at all. Thanks very much for inviting me, Velvet. It's great to be on Boardroom.Media.
Graham, why is there so much focus on the aged care sector and what has the impact of the Royal Commission into aged care, quality and safety had on the industry?
That's a good question, Velvet. There's obviously been a significant spotlight placed on the aged care sector because of the Royal Commission and that's obviously been created through, really exposed the neglect of our loved ones and so forth in facilities and in the home care sector and also that we feel that there's been a failing of duty of care by providers. The reality is, that, you know, if you weren't scared of going into a care facility before, you're literally terrified now. And so the problem that we see is that there's a massive ageing population and we've also got a challenge now is that we have less taxpayers per capita than we've ever had in history. And so we would challenge the government as to the amount of funding to the sector. Our next challenge is that we have a significant shortage of staff. The average age of an RN or a Registered Nurse in the aged care sector is in their early 50s and so we’re going to have a very large portion of that workforce retiring in the next five to 10 years. And there's no real young people coming into the sector. So we've definitely some headwinds happening with the challenges and this is being highlighted by what the Royal Commission is finding.
In the interim report released last year, as well as the special report looking at the sector's response to COVID-19 released earlier this month, both identified massive shortfalls in the industry. What does HSC offer to help these problems?
I think, you know, to go back one part, is that, you know, when you have a problem around neglect, duty of care and so forth, obviously the first way to fix that is to show accountability and traceability. And that's what the Royal Commission is sort of pointing towards is that they want to see more transparency of what's happening in the industry, how the industry is spending funds and how they can prove that they're providing the care. So there's only really two ways to do that. And the current model has been, I think part of the problem is, is that the sector has said will, if we've got a problem, let's just employ another person and put another car on the road without investing in the systems and the processes. So what does HSC do? We are, as you mentioned, a data IOT analytics company, and we have developed a sort of the next generation IOT ecosystem or a platform that collects information and then presents it to the providers so they can gather insights and information. So a little bit highbrow there, but the reality is, is that we have a platform and then we use sensors to collect information and then present it to the carers so they can make proactive care decisions, but also to show transparency and accountability of what they're doing.
And Graham, can you give me an example of how your technology works in the field?
Yeah, that will probably simplify it a little bit to give you an example. So our technology, as we said, is a cloud-based ecosystem and so what we need to do is collect sensors. So if I could give you an analogy is this, if we can remember back to the 80s and 90s in the security industry. So I used to have a background in technology all the way back to doing security systems in banks and so forth. We used to have security guards that would walk around and put a little piece of paper in the door to tell you if the door was locked or secure. And then if someone broke in the guard would come around on the next visit and see that the building's been broken into and then alert someone. This is very similar to what's happening in the care sector is that we have nurses walking around and seeing if people have fallen out of beds or have hurt themselves or, you know, need assistance.
So the security sector in the 90s obviously decided to put sensors in. And so with these sensors, they’d collect back to the control panel and so if someone opens a door or window or a movement sensor or the like, those sensors then report back to a central station and that central station would then get a security guard to respond. So some examples of our technology and how that works is that a virtual nurse with the sensors that we're using can look after around 200 residents in the community where one person going and visiting 25 houses to see if that person's okay or alive or walking around the facility, can only really look at around 25 to 30. So we have a significant operational efficiency by using this. And the case study of how it works, Velvet, is that we have a hub that’s placed in the house, a little bit like a modem, but it's actually a medical alarm.
And it’s a medical alarm, so we have categorised, I suppose, the five parts of duty of care for a provider. And so number one is that emergency response. So can I call for help? So if mum has fallen over, she needs help if she's living by herself. Number two is that we monitor vital signs. So looking at blood pressure, glucose, heart rate, temperature, so forth, this is obviously the key indicators of health. Three is that we look at ADL, which stands for activities of daily living. Activities of daily living is very important for people living by themselves in the community or in a village environment is understanding their mobility, how they're moving around, you know, their hygiene, toileting, grooming, showering, bathing, meal preparation, so forth. This allows us not just respond to alerts, but also to provide proactive care if some parts of activity of daily living is not being supported.
And the fourth one is that we have also real-time location systems where we actually can monitor and know that carers have arrived, how long they’ve been on site. And we use this in multiple ways from understanding people in their environment and that the carers have actually been to site and creating the situation where a family member is asking, you know, being told by their mother or father that no-one’s been here, no-one’s looked after me. No one's feeding me. No one's bathing me. And this is the parts that were highlighted from the Royal Commission is that the providers were in a challenging situation. They couldn't actually prove that they had done what they said they had done. With our case study is that to give you some real life examples, is that we're capturing a lot of information there Velvet, and that goes into our ecosystem platform.
And so, number one, if mum falls over, she can call out through a voice activation device and say nurse call, and that will then call a nurse or an ambulance. Number two, with the vital signs. If we notice that her blood pressure reading today has dropped, or that she hasn't showered, or hasn't been to the toilet, or hasn't prepared a meal, we can create some proactive alerts to the care teams to investigate. So a real life example recently in COVID in Melbourne our system is installed. These systems are all funded under the health care packages and so they're all sort of a sub $1,000 mark and are all plug and play, wireless battery operated. So it can easily retrofit into any home. We had a client who had the system in for a number of months. Our dashboard had gone from green to amber, alerted the care team that a lady, her ADL, which is activities of daily living event.
And we noticed, for example, in this situation that the client’s hygiene marker had changed. On investigation of asking the lady how she was, and this is part of the challenge around care, is that the lady said “I’m fine, everything's okay. Nothing wrong”. The nurse asked a little bit further. So like we've noticed that you haven't been bathing. So we have a humidity sensor in the bathroom that can tell if the shower has been turned on and off. The lady is sort of obviously a little bit embarrassed, but basically came back and said, I haven't had any visitors. I've just been doing crosswords. It's quite cool. Oh, well, the real reason is that my arthritis has flared up. It's really painful for me to change and have a shower. Then rechange into pyjamas. I haven't been able to go to the doctor to get my medication checked. And so this is a really high, significant situation of a falls risk. So if that person was changing with arthritis that they could fall over. I could go on and on Velvet, around different types of case studies of how this technology is providing some passive insight to how someone who's in their home or a village or in a residential aged care facility.
And Graham, what market penetration do you currently have and how do you expect to grow that in the coming years?
Well, I took over as the Managing Director of HSC in January, and we've had a very significant year of growth this year. So currently doing, today, sort of hitting around that $2-3 million in sales that would be currently about 0.015% of the Australian market only with a market capitalisation of about $1.3 billion. We see a lot of upside and we have now started, I suppose, the education process. Our penetration to market is actually through the providers. So we provide a white label, wholesale service of our application and our sensors. And we have now partnered with companies like Bolton Clarke. So Bolton Clarke, you may not have heard of, but that's the RSL Care for Queensland and the Royal District Nursing Service for Victoria. They currently look after around 60,000 clients. We've partnered with IRT, which is the Illawarra Retirement Trust down in Wollongong.
They look after 5-6,000 clients, Feros Aged Care, ACH, so based in Adelaide and South Australia Odyssey up at the Gold Coast. So we're working with lots of providers all over Australia in all different States. We've also partnered in New Zealand with a company called Securely for Independence who purchased the old BUPA Home Care business and they have 10,000 plus clients in New Zealand, providing home care and using our technology platform. And we have just recently announced a project that we've won with our partner in Singapore with St John’s Homes for the elderly. So we're doing a residential aged care facility there, a new state of the art project that's being funded by the National Council of Social Services for Singapore through the Singaporean government. So a long way to go, but we're getting there.
The company has recently appointed new board members and announced an advisory board to assist in your growth and improve its value and performance. Can you tell me about this strategy?
Yes. So Velvet, when I came on board, we, as an IOT platform, our business is a subscription model. So we actually charge a licence fee for each sensor that comes into our platform and we see the opportunity of scalability and we are definitely cutting our teeth on the Australian market. It's very, very well respected internationally in the health care sector and so has a lot of high regulatory requirements. And this has allowed us obviously to penetrate into New Zealand and Singapore. So with our new board members of Ramsay Carter, who has worked at Credit Suisse, and has been the Managing Director of Equities at Scotiabank and so forth, has a very large network and footprint through the Asia market. And Leylan Neep, our new Chairman who is extremely experienced as our chairman, who's been the CEO and CFO of a number of ASX companies and is helping us with that regulatory, I suppose, compliance on an ASX level.
So my strength is the technology and the operations and so forth and Ramsay is then helping with the markets and the equities as we grow and Leylan will help with the governance side. In relation to our advisory board, we see some opportunities for some other people, with some extended networks to assist us, to position ourselves to partner with other providers and with those providers, that can be anything from telcos who are wanting to move into the health sector, which is quite popular in overseas markets, but also other primary health networks, government, and so forth.
Now, while your focus is on the aged care sector, can you tell me a bit about HSC’s plans to expand the market share into areas of security and home automation and other sectors?
Velvet, like any platform, so as we’ve started off, is that what HSC Technology Group is, is that we’re a passionate group of technologists that have built this IOT platform, a little bit like an iOS or an Android system. The thing is that there is always going to be sensors out there that collect data. And that's what IOT is, Internet of Things, collecting little pieces of data, and that data is then presented back and then that's aggregated to create information. So we see there's a lot of areas that this platform came segue into. Like our passion is definitely aged care and health care. We see obviously aged care is a megatrend with all of the problems and challenges that we're in, I don't know of anyone that wants to go into a nursing home.
So we are positioning our platform with low cost, scalable sensors and using the Internet of Things to collect that information. This then easily segues across into the security industry and home automation. This is a quite a new sector for the industry in the Australian market. It's quite well advanced and matured in Europe and the US. So smart home and automation and we're seeing it definitely with the Googles and the Alexas and it’s slowly educating the market here in Australia. But we do see some opportunities of working with utility providers like energy and power and telco and insurance to place sensors in the home, which will then provide data around their subscribers and so forth. You know, how much power they are using doors locked, security lights, and so forth. And then we also see a significant segue, and I suppose, you know, mentioning that we've just recently partnered with a Globe SmartLife, which is a part of the Globe Telecom Group.
They currently provide security products to the security industry and they supply 6-700 security providers now currently. And so they'll be taking our technology and our platform to offer that as a service to these providers that you know, the trusted advisers in the community. And the last part of it is I'm pretty keen on agriculture, food security and similar problems like that is happening in the aged care sector, around providing operational efficiencies and transparency and accountability in the agricultural sector, or how we can collect information around animals, crops, water and services in those sectors, and pump it into our platform to communicate to providers about the wellbeing of their livestock. With the livestock is that it allows those people in the agricultural sector to have the same situation of having a dashboard so they can view the cattle, water, their services on a property and doing it at all remotely. And this helps obviously with tyranny of distance and operational efficiencies. Same thing again, with Internet of Things, we've got the opportunities of using different types of communication from Bluetooth, Wi-Fi, satellite, GSM, ethernet and so forth, all different types of communication platforms.
It's been great to talk to you, Graham, thank you for your time.
No worries at all, Velvet. Thanks very much for the opportunity.
I'm Velvet-Belle Templeman, and you're listening to Boardroom.Media.
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